Steve Ballmer: The Future of Productivity

Remarks by Steve Ballmer, CEO of Microsoft
May 26, 2010

STEVE BALLMER: (In progress)  is always the product and the customers who can talk to you about how they’re already using the product. So, all I really want to do today is kind of set that up a little bit. I want to talk to you a little bit about the future of technology, kind of open our minds up and let us dream about where we’re going so you have a little context about what we’re really launching, and what we’re trying to do today.

I want to share with you a little bit then, how we take that sort of vision of technology and mix it with what we’re hearing from you about what’s important to those of you who are in business, what you are asking for from IT and from productivity software and tools. And then I want to have a chance to talk a little bit about the specific products and services that we are launching today here in Singapore.

The computer has been around about, I don’t know, since 1950, what’s that, 60 years, 60 years we’ve had the computer. And 60 years is an amazing time for one industry to continue to reinvent itself, to continue to innovate at the pace that our industry has been able to drive. It’s unbelievable.

If you think back to the early 1900s, and the automobile, you think back to the 1800s and the steam engine, if you think through any period of time, the pace and impact of ongoing multi-year innovation has never been matched to what we have lived through since the dawn of the computer era. And yet, we sit here in 2010, and I can honestly tell you the best is yet to come. We sit here again in 2020, or 2030, we’ll still be talking about the future of productivity, but what that means will be dramatically different. And what we’ll be able to do with the devices, the information, the virtual connections we have with people will have pressed on, again, to an unprecedented level.

So, I’m excited about the products we’re introducing today. But I’m really excited about what we can do in the future. And so, let me have a chance to just play a little video, it’s only two minutes, a little video of what you can expect from us after Microsoft Office 2010.

Roll video, please.

(Video segment.)

That future starts today. Just think about what those people were doing in the video. Next-generation, let’s call it, if you like, video conferencing. The little boy and the little girl communicating across the globe in a virtual classroom, or a virtual meeting room, one speaking in Thai, the other responding in English, that’s the future of the way our businesses will interact around the globe.

Augmented reality, being able to take a smart electronic device and point it at almost anything, a part, a store aisle, an ear, and using information, business intelligence, if you will, that we assemble to help the human mind better understand what they’re seeing and looking at and working with.

Visual models of the physical world that we can navigate, that we can manipulate, control, that we can simulate for virtual design of new products, and services. The ability to look through and navigate huge bodies of information finding just the right insight to make a decision we need to make. Smart electronic paper that really is as flexible and convenient, but that you can mark up and annotate and take notes on in a sensible and efficient way.

Those are the things that we’re working on. And many of those things you’ll see evidence of as we show you the next generation audio and Web conferencing in the Office Communications Service. As we show you what we’ve done, which I consider stunning, for business intelligence with Excel, and SQL Server, and our so-called PowerPivot capabilities. What we’ve done with Outlook and SharePoint. For advanced social networking services, brought and made sensible inside the context of business productivity. How do you say who you are, and what your interests are professionally, what you are expert in, what your colleagues are expert in?

We talk about friends, and friends networks, colleagues and colleagues networking, they’re all concepts that build from this fundamental vision that says there’s a lot more that we can do to change the experience people have using computing, what that means for contact information and people, and how that will help drive business productivity.

As I travel the world, I spend a lot of time talking both to CEOs and to IT people. We talk a lot about kind of what are we trying to get done today, what are you trying to get done today, in your use of IT. And I hear a lot of different themes, and we’re trying to hit on these themes, and let you attack some of these themes with the products that we’re introducing today. A lot of the dialogue says, where does IT really fit in our business? How does IT let me communicate with my employees and drive culture?

I often say to CEOs, here’s a test you should take, can you really broadcast and take feedback from your own employees or not? Can you run a webcast to 100 percent of your population if you want to? Do you tweet, or blog, or twit, or whatever you want to do, inside company walls to have a real-time dialogue with your people? How does technology help drive the relationship with employees, with customers, with trading partners? Very, very important, how do we even exchange information?

Let’s say the three of us want to create a virtual supply chain in cyber space. How do we set it up? How do we ensure integrity and security? Maybe we want to collaborate. He’s looking to borrow money from him, and I’m their lawyer. I don’t know, somehow everybody seems to be in a bad role in that one, but nonetheless putting that together, we send around e-mail and documents, and we just haven’t made it easy enough to have technology improve the productivity of those relationships.

I hear a lot about agility. People we want to move, move, move, we want to introduce new products and services more quickly. A lot of that is how quickly can you get ideas and inputs to flow from sales and marketing people to product development and manufacturing people? Are we agile?

Many businesses particularly in the services sectors as opposed to the manufacturing sectors, actually are in the business of dealing with information, financial services companies, telcos, governments, information is the business. And that means IT systems are essential for delivering agility. And do we really help people put those together, not only the transaction systems, but the systems that allow people to delve in, to be productive, to work ad hoc around a structured workflow. That’s what we’re driving forward with the new Office and SharePoint, and other products that we’re introducing today.

Cost savings. How do you re-engineer a supply chain,or how do you change a formal process in your business, and still know what’s going on with it? The intersection between so-called business intelligence, or data warehousing systems and transaction systems is getting closer and closer together. That’s essential in what we’re trying to do with our new SQL Server release, which is part of this wave of products.

How do you let people actually get access to information? Many companies like to tell me, many companies like to tell me, people are our number one asset. But, do people really have the tools they need to communicate, to collaborate, and to actually look at data. I spent yesterday on a panel with Tony Fernandez, who is the founder of Air Asia. Founder, I guess he bought it out of bankruptcy, basically. But, he’s done amazing things with the company and he was all about we drive innovation from our people.

We drive innovation from our people. And whether it’s the people who handle the bags, the people who check you in, the people who build the websites, the captains, the flight attendants, he wants their best ideas moving, moving. He wants to hear from them. He wants to hear from them. He’ll do anything to hear and to communicate with him. And he was just pushing, pushing, pushing. Me, what’s the next generation? What are you going to give me for tools that helps me do what I need to do as we’re now a 7,000-person airline up from I guess just him and a PA when he started eight or nine years ago.

And last but not least, I think everybody in this room probably understands we’ve got to do this stuff with a level of efficiency in IT itself. IT budgets are not unbounded. If we want to do all these exciting new things that we’re talking about we’re going to have to become more efficient in managing and taking care of the old things. And certainly, if you look at what we’ve done in our backend infrastructure, and in the way you deploy these applications, we put a lot of investment in Office and SharePoint, and Exchange to focus in on reduced cost, and allowing you to go do a set of phenomenal new things.

Today we’re rolling out for our business customers. We’ll have a launch of Office for consumers, for students, that’s coming up here soon. But, today for our business customers here in Singapore we’re rolling out quite a list of new products. New version of Office, of SharePoint, of Project, Visio, our new version of SQL Server, which really has the capabilities, the business intelligence capabilities to support Excel.

New facilities in our Visual Studio development set that let you write custom applications built on top of Office and SharePoint. Our new cloud services built on this next generation of technology, our online services. Office communications online, Live Meeting, Exchange, SharePoint, all brought to the online world, and joining Windows Azure, and SQL Azure, are core platform products, all of which are available and hosted here in Singapore.

So, quite a broad range of new items. Today in the event we’re going to focus a lot on Office and SharePoint, and their business and productivity implications. But, this entire suite of products is being updated essentially simultaneously to try to push the frontier of things that you may want to do from a productivity standpoint.

We’re not going to be able to get into every detail of each product. But, I want to strike some themes that I think we have delivered on and which I encourage you to delve into with our staff, on our web site, with the customers who you’ll have up on stage today. We talk about the future of communications, unified communications, voicemail, web conferencing, audio conferencing, and the efficiency and effectiveness with which you can do that.

I was taking to a large financial services customer that told me they had saved a million dollars a year just by using Office Communications Server instead of the external voicemail, or external voice conferencing system that they had been using, just a small example. Business intelligence, this is the one that is absolutely  people will note it afterward, but it’s stunning the level of innovation that we’ve shown here. The ability to take Excel, to navigate through large amounts of data, to spot insights, to have that happen, in real time, it’s quite, quite, quite interesting.

You’ll have up on stage when I’m done a customer from  a person from AMD, our chip manufacturing customer, they have used this technology, they manufacture microprocessors, they run three shifts, 24 hours a day, 7 days a week, because it’s a very capital intensive business.

They’ve deployed the new version of SQL Server 2008 R2 to collect real time production data. And they’re using the new PowerPivot capabilities in Excel, and the new capabilities that complement that in SharePoint, to dive in and really analyze at real time all of this data that’s coming off of the production line, and to use those insights to enhance customer service, and to save time and reduce cost.

It’s an example of an area of incredible innovation, and I think business intelligence is a theme that strikes more and more people quite vividly as important. I was in Malaysia yesterday. I met with the prime minister and I thought we were going to talk about a lot of different things. But, he’s very focused on one thing which surprised me, KPIs, key performance indicators, a new way to run the government  I’ve never had a government official in any country talk to me about KPIs. But, heck, that’s a business intelligence problem. I love talking about that problem. How do you use technology to monitor key performance indicators? How do you report? How do you sort through the data that comes back? How does that look? I think it’s a super-exciting area in which a lot of business leaders have a lot of interest.

Collaboration, collaboration, I talked about three of us working on a contract of some sort, but the ability to bring people together, the ability to let people self-identify their interests, to share information, the real role that this will have inside the enterprise has only just sort of been lightly tapped.

Today mostly what we do is send e-mail to people that we know. We don’t discover people that we don’t know. We don’t collaborate with people based upon their expertise and interests. We find people who we know and then we get after it. New forms of ad hoc collaboration, really enable in the new Outlook and in the new SharePoint. Enterprise search, enterprise search, search on the Internet works really well for anything that lives in a web page, lives inside a web page. If it’s actually buried down in a database it’s a lot harder to find. That’s why when you type certain things into a search engine they have to be specially programmed to, for example, you type Singapore to LA flight blah, blah, blah, well, it’s got to be able to dig into the database of the airline to get that information. And there are some applications on the Internet that have been specially designed that way.

Well, inside most corporate environments two things are true. Not all the web pages that live inside the corporation have been well indexed, so in that sense it’s sometimes behind the Internet. And what is certainly true in the enterprise is that most of the important information actually lives inside the database. Inside the new SharePoint we’ve created the ability to create connection and automatically search inside business applications to help your users extract that information and really find the things they need to get their job done.

Enterprise content management, so much of what businesses need to do is develop a formal body of knowledge, and you use that to train people, to educate people particularly in the modern world I would say the churn and the employee base in many companies is only going up. And the ability to formally capture knowledge, to manage that knowledge, and to use that knowledge to train and teach is super-important. And you’ll see a variety of things, again, that we have done in the new Office family in order to facilitate that.

The other thing which we’re trying to do infrastructurally is evolve Office from being a product that runs on clients and servers, PCs and servers, to a product that runs in a browser, a product that runs on the PC, a product that runs on the phone, and a product that runs not only on servers, but in the cloud. And so, you see that kind of architectural evolution of Office in what we’ve done in the Office 2010 family.

So, new capabilities on a new infrastructure, and, oh by the way, oh by the way, it’s a better version of Office. Most of us spend a lot of our time in Outlook. It’s a lot easier to spend time in Outlook with 2010. There are calendaring features I didn’t even know existed in Microsoft Outlook. But we brought the Ribbon UI to all of the Office modules. Excel, and the ability to analyze data has really gotten better.

I can actually design PowerPoint slides that look almost as good as the ones that we’re showing you today. I can do it myself now. I’m sorry you had to chuckle so loudly. But I think it brings the point, and makes it alive.

And the list goes on and on. So, I encourage you both as individual end users, as IT people who worry about infrastructure, and as business people trying to deliver new capability and new benefits, I really encourage you to probe the new Office 2010 family of products that we’re launching here today.

You’re going to have a chance to hear from a number of customers. You’ve had a chance to play with the beta release of the product. But I think, particularly when you hear from the customers, it ought to really help you see, and think through how you might use this new family of products inside your own organizations.

I talked about the fact that we’re moving the Office family of products to the cloud. If you talk to anybody at Microsoft these days, or you go to our website, it will say, cloud, cloud, cloud, cloud, cloud, cloud. Or, the cloud, we’re all in. Somebody likes the pun, I guess, of being in the cloud, or something. But at the end of the day, I think it is important for everybody in the room to understand and recognize that part of the way we’re going to achieve the kind of advances that we showed in the video, and take the next steps, and improve on IT agility, and cost, and empowerment is actually by using the cloud in new ways to reduce the amount of expense that people are putting into datacenters, and capital. To improve the agility with which new applications and services can be rolled out, to help fuse the best of the reliability and security and performance of an enterprise datacenter with the standardization and geo-scale and production value that the cloud can bring.

The best of PC-rich client software, and the best of browser-based deployment, nobody wants to trade between those two, we want to stitch them together. And you already see that in some of the previews we’re doing of where we’re taking Internet Explorer 9 and the future of Windows, the best of the Internet, the best of the PC, the best of the datacenter, all woven together.

The amount that will change because of that is quite large. The cloud will create new opportunities, and new responsibilities. Will come to you and say, let us run your Office infrastructure in the Microsoft cloud. That’s an opportunity for us to add more value. Instead of us just providing you software, we’re keeping it updated, we’re running it for you, we’re reducing people costs, we’re reducing capital costs. That’s a great opportunity for us, but it’s also great responsibility, because you’re going to come back to us and say, what about privacy, what about security, what about service-level agreements? You’re going to go, at some point, say, to one of your managers, hey, we should move to the cloud; great opportunity for us to reduce costs. And your boss is going to give you the same speech that you’re going to give us. But this move to the cloud, it’s inevitable. It might happen for you today. IT could happen in two years. It could happen in five years. But it is inevitable, I think, particularly for broad applications like the Office infrastructure that applies essentially to everybody in your businesses.

We’ve already worked with customers in Singapore moving in this direction. An NGO, RSVP, has moved a few thousand people to the cloud. SATS, the aviation terminal services company, has moved several thousand people to the cloud. New opportunities. New responsibilities. New ways of interacting.

I talked about the need to change the way we communicate and collaborate. Well, the cloud will certainly allow us to enhance social and professional interaction. The cloud, though, also is a different kind of beast when it comes to learning. Today, when we give you a piece of software, it does the same thing every time. That’s the beauty of it. It doesn’t watch you, learn about you, watch the world, learn about the world, and get better. It gets better when we ship you a new release, or update the service. Search works differently today on the Internet, and we think we can bring some of the principles of statistical learning, and improvement that we get from sort of our general knowledge with Bing about search. We can bring those to every walk of life.

Why not let somebody, instead of sending  let’s say you wanted to build a little model, you wanted to show sales data by country by GDP. Well, sales data by country is in your systems. GDP growth actually is out on the Internet. What you’d really like to do is just sort of sketch out what you’d like that spreadsheet to look like, and then you’d like the computer to statistically guess exactly what data you need. You don’t want to have to literally learn the internals of all your systems, you don’t want to have to normalize with GDP growth data in a variety of different systems on the Internet. We should do that for you statistically, just the way the search engine does. That will be a next phase of evolution in terms of the value the cloud can bring to your business.

Some of you probably think the cloud means everything goes into the center, and all devices get dumb. No. We believe in a world, as I showed in the video, of smart PCs, smart phones, smart TVs, not PC, phones and TVs that are hard to manage, but ones that have intelligence, and storage, and processing that embrace standards like HTML 5, but then have unique and important value add like we bring with the Windows infrastructure.

And the cloud means changes in the way we build and write our server software. We’re learning so much about how we build development tools that let you write an application that really can be deployed quickly to the cloud. How do we productionize those things, give them to you, change the definition of the hardware and the software in the server, use modern container technologies to repackage servers and storage and compute? That is our future in the cloud.

So, we start that future today. We start that future with the Office essentially productivity service that’s available with Office 2010, and SharePoint, and Exchange, but where the cloud will take us, I think, will be an incredible journey, and one that we expect to make with most of the companies in this room. And I guarantee you, you can count on our hardest and our best innovation, support to help you navigate this transition.

The future, as I’ve said, is very bright. But, I think for all of us in this room who have jobs to do every day, the present is also very bright. A new generation of products, a new family of products that we hope and we expect to participate with you in helping them bring alive in a way that creates new opportunities, new value for the businesses represented in this room, and each and every one of the employees in the organizations that you serve.

I thank you very much for your time. I thank you very much for your attention. In advance, I thank you for using Office 2010 and the family of products, and if you have any questions, problems, that you want to follow-up with me on, I don’t have a chance to take questions today, but my e-mail address is [email protected]. I look forward to meeting you in the virtual world.

Thank you very, very much. (Applause.)


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